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Maryland's Exit Fee Could Decide The Future Of The ACC

I declared at the beginning of the summer that the ACC’s days were numbered, arguing that the conference accepted an undervalued TV contract with ESPN that would cause its more competitive schools to begin looking for new conference homes. The ACC then appeared to lock down its current membership when it increased its exit fee to a staggering $50 million – or three years’ worth of per-school conference distributions, to be more accurate – after it acquired Notre Dame’s non-football sports in September.

Only two schools voted against the new exit fee: Maryland and Florida State. One of them announced yesterday that it’s leaving, exit fee be damned.

Maryland’s Board of Regents voted unanimously on Monday to accept an invitation to join the Big Ten. The school will officially join the conference for the 2014-15 season. Rutgers also accepted a Big Ten invite, agreeing to leave the Big East and bring the Big Ten’s total membership up to 14 schools.

Maryland’s decision to leave may seem outrageous on the surface. The cash-strapped school was forced to cut seven sports programs just to get under budget this year, so it’s unlikely that $50 million is just hanging out in College Park waiting to cover the school’s cost of leaving. Fortunately for the Terrapins, exit fees are usually more suggestions than they are strict rules.

Missouri and Texas A&M technically should have paid more than $20 million each to leave the Big 12 for the SEC, but neither paid more than $13 million. The Big East has a 27-month exit process that reportedly costs $10 million, but Pittsburgh and Syracuse each paid $7.5 million and shortened the wait by a year. Odds are that Maryland will be able to negotiate a lower fee. In a worst case scenario the school could also take the conference to court, arguing that the $50 million fee is punitive.

The real question is how far Maryland’s exit fee will fall, and the answer is much more important for other ACC schools than it is for Maryland. While Maryland will likely receive some financial help from the Big Ten and potentially even boosters like Under Armour billionaire Kevin Plank, a Maryland alum who has publicly announced his support of the school’s Big Ten move, the exit fee will set an important precedent for other ACC schools that have considered leaving the conference.

Should Maryland successfully negotiate the exit fee down to a readily affordable amount, the conference can be sure that more schools will begin testing the waters of conference realignment. The most likely culprit is Florida State, Maryland’s partner in opposing the new exit fee, which flirted with the possibility of joining the Big 12 earlier this year. Florida State’s athletic department has had its own trouble turning a profit in recent years and would undoubtedly enjoy a taste of the Big 12′s $20-million-a-year payout.

Should Florida State join the Big 12, another ACC school could possibly follow. The Big 12 would add another school in order to host a conference championship game, and Clemson and Virginia Tech are two schools often tabbed as possible additions.

Realignment talk is an especially speculative endeavor at this point in the year, but ACC schools will have to consider their options next offseason if Maryland is allowed to leave with an affordable exit fee. Just how affordable that cost of leaving ends up being could decide whether the ACC remains a major conference or recedes to being an afterthought.

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Thanks for the comment, Dave. I actually don’t think the win makes too much of a difference, though FSU is obviously a bigger target for other conferences interested in expansion. The key is the conference’s new grant of rights, which means if teams leave they can’t take their TV rights with them (more on that here). That should, at least in theory, lock the conference in place, though it’s worth noting that nobody has yet to challenge a grant of rights deal in court (a la Maryland challenging the exit fee).